Commentary: Is Prime-Time TV Ready for the Internet?

The next major player in this debate is ABC’s local affiliates, whose role could be diminished as broadcasters reach out to viewers directly through the Internet. This has led to some resentment in the blogosphere, best exemplified through this user’s comment posted on LostRemote.com: "As we watched color bars on the Spanish station outdraw ABC prime a few years ago, we were told to ‘hold on, we’re fixing it.’ So we stuck with them instead of pushing to take back part of prime & run news so Fox wouldn’t win by default. Little did we know ‘fixing it’ meant bypassing locals with the most popular shows." To ABC’s credit, their official press release explicitly states, "ABC is also exploring ways to work with its local broadcast affiliates on these online offerings as they continue to evolve." For a look into how Fox is forging ahead and arranging a revenue sharing deal with its affiliate stations, check out this article from BusinessWeek.

The final major players are the network operators—in other words the cable companies, satellite providers, and telephone companies—whose response to Disney’s plans has largely been muted. Quotes from Fred Dressler, Time Warner’s EVP of programming, can be found in this Multichannel article by Linda Moss: "‘My reaction is quizzical, more than anything,’ Dressler said, noting that the Disney-ABC Television Group ‘is too smart and too thoughtful to just throw something out there without thinking of the impact that it was going to have on their largest distributors.’"

Yet, Disney’s circumvention of cable operators with some of its highest profile content cuts right to the heart of the net neutrality and tiering debate (which SM.com reported on earlier here). As consumers continue to pull more video through the Internet that’s increasingly the same content as is on TV, the network operators will potentially lose TV revenue while adding expenses since their customers pay a flat rate for access yet now they will be using more bandwidth as they watch more online video. CNET News.com staff writer Marguerite Reardon wrote this article with a lead-in that lays out the potential impact of Disney’s move on network operators: "Walt Disney’s bold move to let people download TV shows for free could spell trouble for cable and satellite providers, but it also throws into question the strategy of telephone companies spending billions to get into the paid TV business."

The Answers Will Come
While these are certainly a number of valid questions, the reality is that they’re going to have to be answered at some point if the Internet is to continue its evolution as a medium for delivering video to the masses. Whether Disney is able to tread lightly and not upset too many of the parties invested in traditional TV distribution while simultaneously delivering a high quality and profitable online experience is something that won’t be answered until later this year, after the experiment has a chance to run its course.